- AUD/USD gained some traction on Monday staged a modest rebound from multi-week lows.
- A goodish pickup in the US equity futures extended support to the perceived riskier aussie.
- Hawkish Fed expectations, COVID-19 jitters underpinned the USD and should cap the upside.
The AUD/USD pair edged higher heading into the European session and climbed back above mid-0.7300s, or a fresh daily top in the last hour.
Having found some support near the 0.7325 area, the AUD/USD pair gained some positive traction on Monday and recovered a part of the previous session's losses to the lowest level since October 6. The uptick was sponsored by a goodish rebound in the US equity futures and seemed rather unaffected by the prevalent bullish sentiment surrounding the US dollar. That said, the upside is likely to remain limited amid the return of COVID-19 restrictions in Europe.
Austria said that it would be the first country in Western Europe to reimpose a full lockdown to tackle rising infections and Germany also warned that it may follow suit. This, along with hawkish Fed expectations, should continue to act as a tailwind for the safe-haven greenback and cap gains for the AUD/USD pair. This, in turn, warrants some caution before confirming that the recent downfall has run its course and placing aggressive bullish bets.
In fact, the markets have been pricing in the possibility for an eventual Fed rate hike move by July 2022 and the Fed funds futures indicate a high likelihood of another raise by November amid rising inflationary pressures. The speculations were further fueled by Fed Governor Christopher Waller's comments, saying that the US central bank should speed up the pace of tapering to give more leeway to raise interest rates.
Moving ahead, Monday's US economic docket features the only release of Existing Home Sales later during the early North American session. This, along with the US bond yields, might influence the USD price dynamics and provide some impetus to the AUD/USD pair. Traders will further take cues from the broader market risk sentiment to grab some short-term opportunities around the major.
Technical levels to watch
|Today last price||0.7251|
|Today Daily Change||0.0018|
|Today Daily Change %||0.25|
|Today daily open||0.7233|
|Previous Daily High||0.7292|
|Previous Daily Low||0.7227|
|Previous Weekly High||0.7371|
|Previous Weekly Low||0.7227|
|Previous Monthly High||0.7557|
|Previous Monthly Low||0.7191|
|Daily Fibonacci 38.2%||0.7252|
|Daily Fibonacci 61.8%||0.7267|
|Daily Pivot Point S1||0.7209|
|Daily Pivot Point S2||0.7185|
|Daily Pivot Point S3||0.7144|
|Daily Pivot Point R1||0.7274|
|Daily Pivot Point R2||0.7316|
|Daily Pivot Point R3||0.734|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.